Honduras

Member Organizations

Member Organization Associate Other PAOs

  Colegio de Peritos Mercantiles y Contadores Públicos
  Colegio Hondureño de Profesionales Universitarios en Contaduría Pública

Legal and Regulatory Environment

  • Overview of Statuatory Framework for Accounting and Auditing

    The corporate financial reporting framework in Honduras is established under the Commercial Code of 1950, as amended, and the Accounting and Auditing (A&A) Law No. 189 of 2004. The Code requires companies to keep accounting records and sets requirements relating to the preparation of financial statements. In addition, the Code requires corporations (sociedad anónima) to appoint a comisario with broad oversight responsibilities. The comisario combines some characteristics of an internal auditor, external auditor, and an audit committee in one individual.

    The A&A Law requires all entities—other than regulated companies described below—to prepare annual financial statements and establishes the Accounting and Auditing Standards Technical Board (JUNTEC) as the national standard-setter. JUNTEC adopted IFRS and IFRS for Small-and Medium-sized Entities through the Resolution No. 1 of 2010 and subsequently published the standards in the official gazette, for application by all entities other than banks and financial institutions.

    Listed companies, banks, financial institutions, and insurance companies are regulated by the National Banking and Insurance Commission (CNBS) and are required to prepare their financial statements in accordance with the CNBS regulation. The CNBS has issued the following regulations to adopt IFRS modified according to the national standards for the following entities: (i) Circular No. 068 of 2014 for banks and financial institutions, effective as of 2016; (ii) Circular No. 084 of 2014 for insurance companies, effective as of 2017; and (iii) Circular No. 014 of 2016 for stock exchanges and brokerage firms, effective in 2019.

    In terms of the audit framework, JUNTEC, through Resolution No. 2 of 2008, has adopted ISA by reference, as translated into Spanish, and subsequently published the standards in the official gazette for all mandatory audits since 2012. In line with JUNTEC Resolution No. 3 of 2017, the latest version of ISA that is in effect in the jurisdiction is the 2016–2017 ISA. JUNTEC has not adopted ISQC 1 standards. In addition, the CNBS Law of 1995 authorizes the CNBS to set auditing standards for regulated entities under its supervision. CNBS through Circular No. 075 of 2011, requires auditors performing a mandatory audit of entities under its supervision to apply ISA as adopted by JUNTEC.

  • Regulation of Accountancy Profession

    In Honduras, the profession is regulated at the state level by Decree No. 73 of 1962, by the National Banking and Insurance Commission (CNBS), specifically for auditors of regulated companies, and at the professional level by the by Decree No. 74 of 1966, as amended by Decree No. 71 of 2004, and the Decree No. 19 of 1993.

    Under Decree No. 73 of 1962, professional associations are authorized to regulate their respective fields of activity, including the activities of professional accountants. The decree mandates mandatory membership within a professional association to practice a profession. Professional accountants are, therefore required to join a professional accountancy organization (PAO).

    There are two segments of the profession in Honduras: public accountants (contador publico) who are authorized to offer accounting and auditing services, and accounting technicians (perito mercantiles) who are authorized to provide bookkeeping and other services including independent audits of financial statements. The following PAOs have been established by law: the CPMCPH by Decree No. 74 of 1966, as amended by Decree No. 71 of 2004, and the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP) by Decree No. 19 of 1993. The CPMCPH comprises accounting technicians (perito mercantiles) and public accountants (contador publico) while the COHPUCP comprises only public accountants.

    The Honduran Constitution sets IPD requirements for all accounting professionals. The Ministry of Education and universities have a role in establishing IPD requirements for public accountants and accounting technicians. Public accountants are required to have a university accounting degree, while accounting technicians are required to hold a secondary education degree. The only other requirement to be able to practice as an accountant and/or auditor in Honduras is to be registered at a PAO as stipulated by Decree No 73 of 1962. There are no examination, practical experience, or continuing professional development (CPD) requirements to offer services.

    In accordance with the laws that established the PAOs, both the CPMCPH and the COHPUCP are empowered to: (i) maintain registries of accounting technicians, public accountants, and firms; (ii) set ethical standards; and (iii) develop an investigative and disciplinary system. Both PAOs also offer voluntary CPD training for members; however, based on their respective founding legislation, the PAOs do not have the legal authority to implement other initial professional development (IPD) requirements or enforce mandatory CPD requirements for their members.

    Auditors providing services to entities regulated by the CNBS—i.e., public interest entities which include banks, financial institutions, and insurance companies—are subject to its regulation, in accordance with Circular No. 075 of 2011. The CNBS is empowered to: (i) register auditors providing services to entities under its supervision; (ii) set accounting and auditing standards for entities under its authority; (iii) sets IPD requirements for CNBS registered auditors; (iv) investigate and discipline CNBS registered auditors; and (v) require audit firms to establish quality control mechanisms and conduct reviews only when a suspicion or risk is identified.

  • Audit Oversight Arrangements

    There are no independent audit oversight arrangements in Honduras. Public accountants (contador publico) and accounting technicians (perito mercantiles) offering audit services are required to join a professional accountancy organization (PAO) and are then regulated through the membership requirements of the PAO which primarily focus on education requirements.

    There are two PAOs in Honduras: the Colegio de Peritos Mercantiles y Contadores Públicos de Honduras (CPMCPH), comprising accounting technicians and public accountants, and the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP), comprising public accountants. The only requirement to apply for membership with either of the two PAOs is to have completed the relevant academic education.

    In accordance with the laws that established the PAOs, both the CPMCPH and the COHPUCP are empowered to: (i) maintain registries of accounting technicians, public accountants, and firms; (ii) set ethical standards; and (iii) develop an investigative and disciplinary system. Both PAOs also offer voluntary continuing professional development (CPD) training for members; however, based on their respective founding legislation, the PAOs do not have the legal authority to implement other IPD requirements or enforce mandatory CPD requirements for their members.

    Auditors providing services to entities regulated by the National Banking and Insurance Commission (CNBS)—i.e., public interest entities which include banks, financial institutions, and insurance companies—are subject to its regulation, in accordance with Circular No. 075 of 2011. The CNBS is empowered to: (i) register auditors providing services to entities under its supervision; (ii) set accounting and auditing standards for entities under its authority; (iii) sets IPD requirements for CNBS registered auditors; (iv) investigate and discipline CNBS registered auditors; and (v) require audit firms to establish quality control mechanisms and conduct reviews only when a suspicion or risk is identified

  • Professional Accountancy Organizations

    Colegio de Peritos Mercantiles y Contadores Públicos de Honduras (CPMCPH)

    The CPMCPH was established by Decree No. 74 of 1966, as amended by Decree No. 71 of 2004. The CPMCPH is the professional body for accounting technicians and public accountants. It is responsible for promoting the interests of the profession and advocating to the government, regulators, and universities; establishing ethical requirements; setting investigative and disciplinary (I&D) procedures; providing training programs for its members; and supporting the adoption of international standards and the regulation of the profession through its participation in the Accounting and Auditing Standards Technical Board (JUNTEC).

    In addition to being a member of IFAC, the CPMCPH is a member of the Inter-American Accounting Association.

    Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP)

    The COHPUCP was founded in accordance with Decree No. 19 of 1993 and is the professional body for public accountants. The COHPUCP is responsible for representing public accountants to the government, regulators, and universities; setting ethical standards and I&D procedures for its members; and organizing continuing professional development activities for its members. In addition, COHPUCP also participates in the standard-setting process through its representation in JUNTEC.

  • Projects or Other Information

Adoption of International Standards

  • Quality Assurance

    In Honduras, there is no legal requirement for a mandatory quality assurance (QA) review system however, all professional accountants offering auditing services are required to join a professional accountancy organization.

    The Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP) reports that Accounting and Auditing Standards Technical Board has developed a project to update its founding law, the Accounting and Auditing Law of 2004, to establish and implement a mandatory QA system for all auditors in the jurisdiction.

    While COHPUCP has no legal authority to establish a mandatory QA review system since 2010, has been working to operationalize a voluntary QA review system for its members, as part of the Inter-American Development Bank Multilateral Investment Fund project, developed regulations establishing a voluntary QA review system for its members. As of 2019, the system has not become operational, there is no indication of whether it will become operational in the near future, and the extent of compliance of COHPUCP’s system against SMO 1 requirements needs clarification.

    Lastly, the National Banking and Insurance Commission requires audit firms under its supervision to establish quality control mechanisms in accordance with Circular No. 075 of 2011. However, audit reviews are only carried out when a suspicion or risk is identified.

    Current Status: Partially Adopted

  • International Education Standards

    In Honduras, public accountants and accounting technicians are regulated at the state level by Decree No. 73 of 1962 which sets initial professional development (IPD) requirements and requires mandatory membership in a professional organization.

    Universities and the Ministry of Education also have a role in IPD requirements for professional accountants. Public accountants are required to have a university accounting degree while accounting technicians are required to hold a secondary education degree. There are no examination, practical experience, or continuing professional development (CPD) requirements in order to offer services.

    The two PAOs in the jurisdiction, the Colegio de Peritos Mercantiles y Contadores Publicos de Honduras and the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública, are not legally empowered to set IPD or CPD requirements, although both provide voluntary trainings for their members.

    In accordance with Circular No. 075 of 2011, the National Banking and Insurance Commission has established practical experience, minimum level of qualifications and basic training requirements for auditors of regulated companies; however, as reported by the PAOs in the jurisdiction, these requirements are not in line with those of the revised IES.

    Although some of the requirements of revised IES appear to have been incorporated into the national requirements, it does not appear that any other national requirements exist that incorporate the revised IES.

    Current Status: Partially Adopted

  • International Standards on Auditing

    The Accounting and Auditing Law No. 189 of 2004 empowers the Accounting and Auditing Standards Technical Board (JUNTEC) to set auditing standards.

    JUNTEC, through Resolution No. 2 of 2008, has adopted ISA by reference, as translated into Spanish, and subsequently published the standards in the official gazette for all mandatory audits since 2012. In line with JUNTEC Resolution No. 3 of 2017, the latest version of ISA that is in effect in the jurisdiction is the 2016–2017 ISA. JUNTEC has not adopted ISQC 1 standards.

    In addition, the National Banking and Insurance Commission (CNBS) Law of 1995 authorizes the CNBS to set auditing standards for regulated entities under its supervision. CNBS through Circular No. 075 of 2011, requires auditors performing a mandatory audit of entities under its supervision to apply ISA as adopted by JUNTEC.

    Current Status: Partially Adopted

  • Code of Ethics for Professional Accountants

    The Colegio de Peritos Mercantiles y Contadores Publicos de Honduras (CPMCPH) and Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP) are legally empowered—Decree No. 74 of 1966, as amended by Decree No. 71 of 2004, and Decree No. 19 of 1993, respectively—to set ethical requirements for their members. As reported in their SMO Actions Plans, CPMCPH issued a Code of Ethics in 2005, which is not aligned with the IESBA Code of Ethics and COHPUCP has adopted the 2011 IESBA Code of Ethics for its members.

    As of the date of the assessment, CPMCPH has not stated plans to review the latest IESBA Code of Ethics and update its ethical requirements. COHPUCP plans to update the version of the code, to the latest available version of the IESBA Code translated into Spanish in 2019 and plans to amend Decree No. 19 of 1993 to adopt the IESBA Code of Ethics by legal reference.

    Current Status: Partially Adopted

  • International Public Sector Accounting Standards

    The General Accounting Office (CGRH), within the Financial Secretary of Honduras (SEFIN), sets public sector accounting standards in accordance the Budget Organic Decree No. 83 of 2004.

    In 2012, SEFIN collaborated with the Accounting and Auditing Standards Technical Board (JUNTEC)—as part of the legal provision in the Accounting and Auditing Law No. 189 of 2004—to adopt IPSAS. In 2014, JUNTEC formally adopted IPSAS, as published in the Official Gazette through the Resolution No. 60 of 2014. In 2015, SEFIN reaffirmed the adoption of the IPSAS by JUNTEC under Resolution No. 223 of 2015.

    The CGRH notes that the 2018 Handbook of International Public Sector Accounting Pronouncements is currently in use. It was adopted on January 1, 2018, with an effective date of January 1, 2019.

    Current Status: Adopted

  • Investigation and Discipline

    In Honduras, the two professional accountancy organizations—the Colegio de Peritos Mercantiles y Contadores Publicos de Honduras (CPMCPH) and the Colegio Hondureño de Profesionales Universitarios en Contaduría Pública (COHPUCP)—have legal responsibilities to establish investigative and disciplinary (I&D) procedures for their members.

    In accordance with the Decree No. 74 of 1966, as amended by Decree No. 71 of 2004, the CPMCPH established the Court of Honor to operate an I&D system for its members, which it reports is not fully in line with the SMO 6 requirements.

    COHPUCP, empowered by the Decree No 19 of 1993, also has a Court of Honor for its members. In 2019, COHPUCP completed a self-assessment of its I&D system against the requirements of SMO 6 and has identified the following gaps: members of the I&D committee do not include non-accountants, information on misconduct is not publicly available, and the system lacks administrative processes and public interest considerations.

    Current Status: Partially Adopted

  • International Financial Reporting Standards

    The Accounting and Auditing Standards Technical Board (JUNTEC) is responsible for setting accounting standards in accordance with the Accounting and Auditing Law No. 189 of 2004. JUNTEC adopted IFRS and IFRS for Small-and Medium-sized Entities through the Resolution No. 001 of 2010 and subsequently published the standards in the official gazette, for application by all entities other than banks and financial institutions.

    The National Banking and Insurance Commission (CNBS) regulates public interest entities in Honduras and sets the regulation for the preparation of their financial statements. The CNBS has issued the following regulations to adopt IFRS modified according to the national standards for the following entities: (i) Circular No. 068 of 2014 for banks and financial institutions, effective as of 2016; (ii) Circular No. 084 of 2014 for insurance companies, effective as of 2017; and (iii) Circular No. 014 of 2016 for stock exchanges and brokerage firms, effective in 2019.

    Current Status: Partially Adopted

Disclaimer

IFAC bears no responsibility for the information provided in the SMO Action Plans prepared by IFAC member organizations. Please see our full Disclaimer for additional information.

Methodology

Methodology
Last updated: 11/2019
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